crunching the numbers

Well, I just added up every position I closed in June & July in my accounts. At this point I'm pretty much stopped out of all but a few positions, so I've been updating my records and playing with spreadsheets.

$2702.19 gross
commissions 600
net $2,102.19

22 unique stocks traded, some with many entries, sells, reentries:

2 were breakeven

12 losers for -$3000
5 were "total losses" of 1% of the acct.

8 winners for $6400. Only 4 of those were significant
AAPL 1900
ILF 1400
MTOX 1250
BGC 950
which add up to 5500 of my 6400 profits.

It also means that in 2 months I'm up 3.3% net. I guess that's okay. If you were to extrapolate it out that would be around 20% annual. It's better than I used to do. In the past I've lost $1k on PG or TM in my IRA. Those two losses were as much as I just cleared in 2 months.

Or worse, $1k on BTJ in my $10k izone acct, or $500 on NWRE in there. Ugh.

So, what does it all mean? There's definitely something to the "you
make all your money on a few good stocks" theory. And the keep your
losses small one, as well.

June was pretty much flat for me, I think most of my gains came in July. If the kind of upward market we saw those first two weeks of July can keep going remains to be seen.

Buying more, but smaller stakes

Recently I've been reading Tharp's Trade Your Way to Financial Freedom and thinking about position sizing again.  I had decided that I had too many stocks and was going to have fewer, bigger stakes.  That might have been okay, except that it exposes you to a larger capital risk on one stock.  

So now, I'm writing down my stock purchases with a sell rule for the up and downside.

For example yesterday morning I bought some PAY at $37.98  My loss limit would be at the 50dma of $34.46, which is about 9%.  1R of my current portfolio is $75, so 75/0.09 is $822.  (Losing 9% of 822 is $75 lost.)  Divide that by the shareprice and I bought 20 shares, just to have a round number.

This can change the amount of your position size, depending on how much risk there is in the stock.  For example, other recent buys at the end of last week were CBG and KPN.  CBG had a breakout to a new high.  I bought it with a loss limit of 8.5% (close below 50dma) and got $860 worth.  KPN had a high volume upday and I bought it at 14.76 with a sell rule of 14, or 5% and bought $1460.  If you look at both loss limits, it's for the same dollar amount, but CBG is risking a larger percent, so it's for less total stake of my portfolio.

crazy MIKR action

I got out of MIKR on Tuesday at open. Monday it beat earnings, spiked
up, then fell 30%. Yowzas. That put me down 7% below my initial buy
price. The cool thing was that I had a limit sell order in for 21.98
and the high of the day was 22.37, so I sold 1/4 of my initial stake at
40% gain (after selling 1/2 at 20% gain). So the 7% loss was just on
1/4 of my initial position. I'm liking this partial sell setup.

I also got out of UCTT. It fell below the 50dma and recent support
levels. It might come back, but I wipe my hands of it. This was the
right move. It never did anything but setup lower bases. Not what I
want in a stock. I can pick up something better, like AB.

I'm also selling some of my NSTC. It had a big gap-down this week after
being downgraded, I guess, but has found support at the 14.50 range,
which is also the level it found in early Nov, so I'm holding some.